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Reliance Industries Limited Versus Commissioner of Central Excise, Raigad

2017 (2) TMI 96 - CESTAT MUMBAI

CENVAT credit - whether the Chemical viz. "Sodium Silico Aluminate" which is a "Molecular Sieve" used to extract N-Pharaffin from Kerosene for manufacture of "Linear Alkyl Benzene" (LAB) is an "Input" within the meaning of Rule 57A of the Central Excise Rules, 1944? - Held that: - It is clear that during the entire process of manufacture from Kerosene stage to obtaining the Linear Alkyl Benzene (LAB) Sodium Silico Aluminate is indeed used which opts as a major role in the process as catalyst .....

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nded period of limitation - Held that: - the availment of credit on Molecular Sieves was known to the department, therefore, the demand is hit by limitation also as there is no suppression of fact on the part of the appellant - demand set aside. - CENVAT credit allowed - appeal allowed - decided in favor of appellant. - E/1432/06 - A/85219/17/EB - Dated:- 5-1-2017 - Shri Ramesh Nair, Member (Judicial) And Shri Raju, Member (Technical) Shri J.C. Patel, Advocate for Appellant Shri V.K. Agarwal .....

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ng of process vessel wherein these are used to separate hydrocarbons and other mixtures by selective occlusion of one or more of constituents, which is a process of sieving, employed for segregation if different fractions. Since these Molecular Sieve are used in the process vessel for considerable length of time, it falls in the category of equipment/appliance/apparatus for production/processing of goods/bringing about any change in any substance in or in relation to the manufacture of the final .....

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inal product. He referred to the definition of input service wherein the input even though used indirectly and even if not contained in the final product it will be considered as input within the meaning under rule 57. He submits that the goods in question that is Molecular Sieve is not capital goods or even parts thereof. Therefore the contention of the adjudicating authority for excluding the item from the definition of input is not correct. He submits that the terms goods used in or in relati .....

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Ltd. Vs. Collector of C. Ex., Calcutta-I 1996 (86) E.L.T. 613 (Tribunal) (ii) Alembic Chemical Works Co. Ltd. Vs. Commr. of C Ex. & Cus. Baroda 1998 (100) E.L.T. 360 (Tribunal) (iii) Residency Foods & Beverages Ltd. Vs. Commr. of C. Ex., Allahabad 1998 (101) E.L.T. 103 (Tribunal) (iv) Cans & Closures Ltd. Vs. Collector of C. Ex. 1991 (56) E.L.T. 474 (Tribunal), Upheld by Supreme Court Collector Vs. Cans and Closures Ltd. 1995 (78) E.L.T. A 138 (S.C.) (v) Collector of Central Ex., Ca .....

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.-Mumbai) (x) Tamilnadu Petro-Products Ltd. Vs. Collector of C. Ex. Madras 2000 (120) E.L.T. 250 (Tribunal-LB) (xi) Cyanamid India Limited Vs. Collector of Central Excise, Baroda 1997 (93) E.L.T. 576 (Tribunal) He particularly referred to the judgment of this Tribunal in the appellant's own case according to which the goods in question used as catalyst in the manufacture of final products were allowed as input. In the present case also the goods i.e. "Sodium Silico Aluminate" which .....

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ecular Sieve was eligible for modvat credit accordingly the audit para was closed. Subsequently after 3 years the Assistant Commissioner raised the issue and show cause notice was issued invoking the larger period of limitation which is clearly not applicable in the facts of the present case. He also relied upon the following judgments: (i) Nila Baurat Engineering Ltd. Shri Yogesh Jhalla Vs. Commissioner of Central Excise, Nasik 2016-TIOL-2550-CESTAT-MUM (ii) M/s. CJ Shah and Co. Vs. Commissione .....

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e of which the same is used. Therefore the process of manufacture of final products i.e. LAB is as follows: 2.2 The process of manufacture of LAB, briefly stated, is as follows: (a) Kerosene is pre-fractionated to obtain C10-C14 fractions of Kerosene (Pre-fractionation) (b) The C10-C14 Kerosene is fed to hydrogen unit for removal of impurities with the help of hydrogen. (Hydrogen treatment) (c) N-Paraffins are extracted from the purified C10-C14 Kerosene by the use of a chemical called "Sod .....

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of Kerosene and in the process of extraction of N-Paraffins from the purified C10-C14 Kerosene by the use of a chemical called "Sodium Silico Aluminiate' which is a "Molecular Sieve" is used by the process of absorption, thereafter N-Paraffins so extracted is then converted into Olefin in the Pacol unit. The Olefins are then treated with Benzene in the alkylation unit to obtain LAB. It is clear that during the entire process of manufacture from Kerosene stage to obtaining the .....

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supports the case of the appellant but in particular, in their own case reported as Reliance Industries Ltd. Vs. CCE 2004 (178) E.L.T.529 on the identical goods i.e Molecular Sieve, the modvat credit was allowed. The relevant part of the order is reproduced below: "III. Molecular Sieves . III(a) The relevant portion of the Commissioner (Appeals) order denying the Modvat credit on Molecular Sieves as :- "These are used at the POY plant. The adjudicating authority has denied credit on g .....

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7Q for molecular sieves was issued by the JAC in July 1996 vide Order in original No. SRT-IV/Adj/82/96/MP dated 18-7-1996. Since the item has no role to play in the manufacture of goods in the light of Supreme Court judgment in Rajasthan Steel Chemicals Works, 1991 (55) E.L. T. 444 credit is not available to this item. I also disagree with the appellants contention that if an article was not covered under Rule 57Q, it was fully covered under Rule 57A." III(b) Findings The Commissioner (Appe .....

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